Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

19. Commitments and Contingencies

Legal Proceedings

The Partnership, from time to time, is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur and the amount of the loss can be reasonably estimated, the estimated amount of the loss is accrued in the condensed consolidated financial statements. If the Partnership determines that a loss is reasonably possible, the Partnership will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of loss can be made. While the resolution of these matters cannot be predicted with certainty, the Partnership currently believes there are no pending legal proceedings in which the Partnership is currently involved the outcome of which will have a material effect on the Partnership’s financial condition, results of operations, or cash flows.

Bond Purchase Commitments

The Partnership may enter into bond purchase commitments related to MRBs to be issued and secured by properties under construction.  Upon execution of the bond purchase commitment, the proceeds from the MRBs will be used to pay off the construction related debt.  The Partnership bears no construction or stabilization risk during the commitment period. The Partnership accounts for its bond purchase commitments as available-for-sale securities and reports the asset or liability at fair value. Changes in the fair value of bond purchase commitments are recorded in other comprehensive income. The following table summarizes the Partnership’s bond purchase commitment as of September 30, 2021: 

Bond Purchase Commitments	Commitment Date	Maximum Committed Amounts Remaining		Rate			Estimated Closing Date	Fair Value as of September 30, 2021
CCBA Senior Garden Apartments	July 2020	$	3,807,000		4.50	%	Q4 2021	$	401,223
Anaheim & Walnut	September 2021		3,900,000		4.85	%	Q3 2024		-
		$	7,707,000					$	401,223

Mortgage Revenue Bond and Taxable Mortgage Revenue Bond Commitments

The Partnership has committed to fund additional proceeds related to the Ocotillo Springs Series A MRB (Note 6) and taxable MRB (Note 12) while the related property is under construction. The Partnership’s remaining maximum commitments related to the Series A MRB and the taxable MRB totaled approximately $4.9 million and $6.0 million, respectively, as of September 30, 2021.

The Partnership has committed to fund additional proceeds related to the Jackson Manor Apartments MRB (Note 6) while the related property is under rehabilitation.  The Partnership’s remaining maximum commitment related to the MRB totaled approximately $2.0 million as of September 30, 2021.

Governmental Issuer Loan and Taxable Governmental Issuer Loan Commitments

The Partnership has outstanding commitments to fund the proceeds related to the GILs and a taxable GIL while the related properties are under construction.  Disclosures of remaining maximum commitment for GILs and a taxable GIL are in Note 7 and Note 12, respectively.  

Equity Investment Commitments

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has outstanding commitments to contribute equity to unconsolidated entities.  See Note 9 for disclosure of remaining maximum commitments.

Property Loan Commitments

The Partnership has outstanding commitments to fund the proceeds related to property loans while certain properties are under construction. See Note 10 for disclosure of remaining maximum commitments.  

Construction Loan Guarantees

The Partnership has entered into guaranty agreements for loans related to certain investments in unconsolidated entities. The Partnership will only have to perform on the guarantees if a default by the borrower were to occur. The Partnership has not accrued any amount for these contingent liabilities because the likelihood of guarantee claims is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of September 30, 2021:

Borrower	Guarantee Maturity	Maximum Balance Available on Loan		Loan Balance as of September 30, 2021		Partnership's Maximum Exposure as of September 30, 2021		Guarantee Terms
Vantage at Stone Creek	2023	$	30,824,000	$	30,501,955	$	15,250,978	(1)
Vantage at Coventry	2023		31,500,000		31,173,875		15,586,937	(1)
Vantage at Murfreesboro	2022 (2)		30,500,000		30,500,000		15,250,000	(3)

⁽¹⁾ The Partnership’s guaranty was initially for the entire amount of the loan and will decrease based on the achievement of certain events or financial ratios. The Partnership’s maximum exposure will decrease to 25% of the loan balance when certain debt service coverage levels are achieved by the borrower.

⁽²⁾ The initial maturity is September 2022, though the borrower may extend the maturity date for one 6-month period.

⁽³⁾ The Partnership’s guaranty is for 50% of the loan balance. The Partnership has guaranteed up to 100% of the outstanding loan balance upon the occurrence of fraud or other willful misconduct by the borrower or if the borrower voluntarily files for bankruptcy. The guaranty agreement requires the Partnership to maintain a minimum net worth and maintain liquid assets of not less than $5.0 million. The Partnership was in compliance with these requirements as of September 30, 2021. The Partnership has also provided indemnification to the lender for costs related to environmental non-compliance and remediation during the term.

Other Guarantees and Commitments

The Partnership has entered into guarantee agreements with unaffiliated entities under which the Partnership has guaranteed certain obligations of the general partners of certain limited partnerships upon the occurrence of a “repurchase event.” Potential repurchase events include LIHTC tax credit recapture and foreclosure. The Partnership’s maximum exposure is limited to 75% of the equity contributed by the limited partner to each limited partnership. No amount has been accrued for these guarantees because the likelihood of repurchase events is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of September 30, 2021:

Limited Partnership(s)	End of Guaranty Period	Partnership's Maximum Exposure as of September 30, 2021
Ohio Properties	2026	$	3,011,522
Greens of Pine Glen, LP	2027		2,046,028